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Amgen Inc. v. F. Hoffmann-LaRoche LTD et al Doc.

550
Case 1:05-cv-12237-WGY Document 550 Filed 06/26/2007 Page 1 of 5

UNITED STATES DISTRICT COURT


DISTRICT OF MASSACHUSETTS

AMGEN INC.,

Plaintiff,

v. CIVIL ACTION No. : 05-CV-12237-WGY

F. HOFFMANN-LA ROCHE LTD,


ROCHE DIAGNOSTICS GmbH,
and HOFFMANN-LA ROCHE INC.,

Defendants.
_____________________________________________________________________________

MEMORANDUM IN SUPPORT OF NON-PARTY FRESENIUS’ ASSENTED-TO


MOTION FOR LEAVE TO FILE UNDER SEAL DOCUMENTS CONTAINING
FRESENIUS’ TRADE SECRETS WHICH WERE SUBMITTED BY AMGEN IN
CONNECTION WITH AMGEN’S MOTION FOR SUMMARY JUDGMENT ON
ROCHE’S ANTITRUST AND STATE LAW COUNTERCLAIMS
______________________________________________________________________________

Non-Party Fresenius Medical Care Holdings, Inc., d/b/a Fresenius Medical Care North

America (“Fresenius”), hereby submits this Memorandum, and accompanying Declaration, in

support of its Assented-To Motion for Leave to File Under Seal Documents Containing Non-

Party Fresenius’ Trade Secrets Which Were Submitted by Amgen in Connection With Amgen’s

Motion for Summary Judgment on Roche’s Antitrust and State Law Counterclaims, pursuant to
Local Rule 7.2 and the protective order in effect in this case. The confidential information

Fresenius seeks to file under seal is very limited and specific, and includes two sentences related

to discounts Fresenius obtained from Amgen. As set forth in the accompanying Declaration of

Robert J. McGorty (“McGorty Declaration”), Fresenius’ Vice President of Finance and

Administration for Fresenius Medical Services Division, Fresenius considers this information

extremely confidential and has protected it from public disclosure as a trade secret. Indeed, the

continued secrecy of this information is critical and disclosure in the public record would cause

Dockets.Justia.com
Case 1:05-cv-12237-WGY Document 550 Filed 06/26/2007 Page 2 of 5

Fresenius financial and competitive damage. This information constitutes Fresenius’ trade

secrets, and therefore it should not be disclosed in the public record.

I. Background

Fresenius is not a party to this action.

Fresenius is a major supplier of products and services for individuals with chronic kidney

failure. Fresenius operates more than 1,500 outpatient dialysis clinics in the U.S., and is also a

major supplier of a variety of dialysis products and equipment, including dialysis machines,

dialyzers and other dialysis-related supplies. As part of its business, Fresenius is a customer of

Amgen Inc. (“Amgen”) and purchases Epogen™ from Amgen for use in treating patients. The

prices at which Fresenius purchases Epogen™ from Amgen is governed by a Sourcing and

Supply Agreement between the two entities. The Sourcing and Supply Agreement that sets the

price at which Fresenius currently purchases Epogen™ from Amgen, including the discounts

available to Fresenius, was executed in October of 2006 (“2006 Epogen™ Sourcing & Supply

Agreement”).

II. The Information in Exhibit 4 to the Fraser Declaration Is Confidential and Trade
Secret Information, Not Publicly Available, And Would Cause Harm to Fresenius If
Revealed
Exhibit 4 of the Declaration of James M. Fraser in Support of Amgen’s Motion for

Summary Judgment on Roche’s Antitrust and State Law Counterclaims filed by Amgen on June

15, 2007 (“Fraser Decl. Exhibit 4”), (Docket No. 521) is a declaration of Mats Wahlstrom

(“Wahlstrom Declaration”), President of Fresenius Medical Care’s Services Division in North

America. The Wahlstrom Declaration describes certain terms of the 2006 Epogen™ Sourcing &

Supply Agreement between Amgen and Fresenius. Fresenius designated the Wahlstrom

Declaration highly confidential in its entirety. Fresenius is now seeking the further confidential

treatment of the trade secret information contained in that declaration.

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Case 1:05-cv-12237-WGY Document 550 Filed 06/26/2007 Page 3 of 5

In particular, Fresenius contends that certain information in paragraph 8 of the

Wahlstrom Declaration reveals Fresenius’ confidential information regarding the value of

discounts available to it under the 2006 Epogen™ Sourcing & Supply Agreement with Amgen.

Fresenius considers the discount structure of the 2006 Epogen™ Sourcing & Supply Agreement

to be confidential and has taken pains to ensure that such information is not made public. See

accompanying Declaration of Robert J. McGorty at ¶¶ 4-8 (“McGorty Declaration”). Public

disclosure of the discount terms of the 2006 Epogen™ Sourcing & Supply Agreement would be

extremely harmful to Fresenius as competitors could use this information to their advantage in

negotiations with Amgen and in formulating pricing and other competitive strategies. This

information should not be made public 1 .

III. The Information At Issue Constitutes Fresenius’ Trade Secrets Under


Massachusetts Law
Under Massachusetts law, a trade secret is defined as:

anything tangible or intangible or electronically kept or stored, which constitutes,


represents, evidences or records a secret scientific, technical, merchandising,
production or management information, design, process, procedure, formula
invention or improvement.

Mass. Gen. Laws ch. 255, § 30(4). A trade secret may consist of “any formula, pattern, device or

compilation of information which is used in one's business, and which gives him an opportunity

to obtain an advantage over competitors who do not know or use it.” CVD, Inc. v. Raytheon Co.,

769 F.2d 842, 850 (1st Cir. 1985)(citing Eastern Marble Products Corp. v. Roman Marble, Inc.,

372 Mass. 835, 364 N.E.2d 799, 801 (1977)). The information at issue here is a “compilation of

information,” allowing Fresenius to obtain an advantage over its competitors who do not have

access to the information. See McGorty Declaration at ¶ 6.

This type of information has been protected as trade secrets by courts. United Rug

Auctioneers, Inc. v. Araslen, 2003 WL 21527545 (Mass Super. Ct. 2003) (finding pricing

1
Specifically, Fresenius seeks leave of this Court to protect the third and fourth sentences of
Paragraph 8 of the Wahlstrom Declaration by redaction.

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Case 1:05-cv-12237-WGY Document 550 Filed 06/26/2007 Page 4 of 5

information and finances confidential and trade secrets); SI Handling Sys., Inc. v. Heisley, 753

F.2d 1244, 1260 (3d Cir. 1985) (noting internal information related to pricing and profit margin

“is not information that is readily obtainable by anyone in the industry” and thus “qualifies for

trade secret protection”); Corporate Relocation, Inc. v. Martin, 2006 U.S. Dist. LEXIS 69098, at

*61 (D. Tex. Sept. 12, 2006) (holding pricing and profit information warrant protection from

public disclosure); J.W.S. Delavau Co. v. Lederman, 26 Phila. 338, 348 (Pa. C.P. 1991) (finding

cost of goods sold, among other information, to constitute trade secrets entitled to protection).

Moreover, the power of a trade secret is built upon its secrecy. CVD, Inc., 769 F.2d at

850. In other words, the party seeking to protect certain information must be able to demonstrate

that reasonable steps have been taken to keep the information secret. Trent Partners & Assocs.

v. Digital Equip. Corp., 120 F. Supp. 2d 84, 111 (D. Mass. 1999). Here, Fresenius has kept

confidential the value of discounts and rebates it received under the supply agreement with

Amgen. See McGorty Declaration at ¶¶ 7-8. Fresenius has taken steps to keep this information

out of the public domain and keep the information confidential. Id. at ¶¶ 5, 7-8.
Finally, trade secret law is intended to maintain and promote standards of commercial

ethics and fair dealing. CVD, Inc., 769 F.2d at 850. If the information at issue was released into

the public domain, Fresenius expects it would be used by its competitors to unfairly gain an

advantage by informing their negotiation positions with Amgen and instructing the formulation

of pricing and other competitive strategies.

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Case 1:05-cv-12237-WGY Document 550 Filed 06/26/2007 Page 5 of 5

IV. Conclusion

For the foregoing reasons, Fresenius respectfully requests that its assented-to motion to

file under seal the two specific sentences contained in Fraser Decl. Exhibit 4 that are discussed

above and in the accompanying McGorty Declaration be granted.

Respectfully submitted,

Dated: June 26, 2007 By: /s/Mark J. Hebert______________


Mark J. Hebert (BBO No. 546,712)
FISH & RICHARDSON P.C.
225 Franklin Street
Boston, MA 02110-2804
Telephone: (617) 542-5070
Facsimile: (617) 542-8906
Counsel for Non-Party Fresenius
Medical Care Holdings, Inc.

CERTIFICATE OF SERVICE

I hereby certify that this document, filed through the ECF system will be sent
electronically to the registered participants as identified on the Notice of Electronic Filing (NEF).

/s/ Mark J. Hebert_________


Mark J. Hebert

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